JAKARTA: Malaysian palm oil futures opened lower on Tuesday after four consecutive sessions of gains, weighed down by weaker Dalian soyoil prices and a stronger ringgit.
The benchmark palm oil contract for January delivery on the Bursa Malaysia Derivatives Exchange lost 23 ringgit, or 0.47%, to 4,868 ringgit ($1,115.23) a metric ton in early trade.
Fundamentals
Dalian’s most-active soyoil contract fell 0.18%, while its palm oil contract gained 0.35%. Soyoil prices on the Chicago Board of Trade were up 0.24%.
Palm oil tracks price movements of rival edible oils as it competes for a share in the global vegetable oils market.
The ringgit, palm’s currency of trade, strengthened 0.11% against the US dollar, making the vegetable oil more expensive for buyers holding foreign currencies
Oil prices eased as markets braced for uncertainties from the US presidential election, after rising more than 2% in the past session as OPEC+ delayed plans to hike production in December and eased supply concerns.
Weaker crude oil futures make palm a less attractive option for biodiesel feedstock.
Estimates by cargo surveyors showed exports of Malaysian palm oil products rose between 11.5% and 13.7% in October, compared with a month earlier.
Indonesia raised its crude palm oil reference price for November to $961.97 per metric ton from $893.64 in October, a trade ministry official told Reuters. The new price will put the export tax for November at $124 per ton.
Palm oil may retrace into a range of 4,747 ringgit to 4,791 ringgit per metric ton, following its failure to break resistance at 4,883 ringgit, according to Reuters’ technical analyst Wang Tao.